5 no-no’s when selling your home

Sellers are understandably usually quite emotionally attached to their homes, and in being so, can often be their own worst enemy, potentially jeopardising a successful sale.

International real estate trends expert, Steve Murray, who is also the editor of REAL Trends, a trends research and publishing firm based in Colorado, will be visiting South Africain August by invitation from RE/MAX of Southern Africa, to share some of his key property insights with local agents.

Peter Gilmour, Chairman of RE/MAX of Southern Africa, says that Steve will undoubtedly enrich the working strategies of many of the agents he comes into contact with. “While we are certainly well on the road to a market recovery, current market conditions remain somewhat challenging, and any real estate professional could certainly benefit from tips and insights to better their working practices.

However, says Gilmour, estate agents are not the only ones who need to up their game. “In order to get the best price for their property in the shortest possible time, sellers need to up their game too.”

He refers to an article recently published on real trends courtesy of Brendon DeSimone, a realtor based in San Francisco, a contributor to the Zillow Blog, and collaborator on multiple real estate books, which describes five things that sellers do that could potentially jeopardise a sale.

The article notes that home sellers today are under a lot of stress. It’s a tougher market, home prices have fallen and many are trying to get as much money as possible to recoup their investment. While real estate agents feel sellers’ pain and are on their side, sellers sometimes do things that make it harder for an agent to sell a home for what it’s worth.

Here are five not-so-great things sellers do that make their real estate agents cross their fingers and hope for the best:

1. Sellers who think their property is unique, thus worth more money
Sellers consider their homes special; most likely they’ve put a lot of heart, soul, and money into fixing it up. It may be where they started a family or built a lifetime of memories. When a seller believes their home is unique, however, they also believe it is worth more. Sellers then end up fixating on an asking price that’s too high, despite the advice of an agent. If it’s priced too high, a home will sit on the market for months. Unfortunately, nine out of 10 times, the seller will end up selling for less money than they would have gotten if the home was listed at an appropriate price from the start.

2. The home is a mess
Sellers: It’s important to pick up the home before a showing. Potential buyers touring a home usually don’t appreciate stepping on a child’s toy and fail to see the charm of a dog’s discarded tennis ball. Buyers want to feel that a home is clean and well maintained. If it’s not, they’ll likely move on to the next.

3. Sellers who hang around during an open house
There’s a reason why real estate agents don’t want sellers sticking around when potential buyers arrive. While a seller may be perfectly friendly and agreeable, they can alienate buyers or make them feel uncomfortable without even knowing it.

4. Holding out for extra money at the last minute
Say a buyer made an offer that was less than what the seller wants. The agent and the buyer have gone back and forth with a series of counter offers. The seller is close to achieving their dream price but they insist on trying to squeeze more out of the buyer. In demanding more money, the seller may have created bad will, as well as stressed those involved in the purchase. When it comes down to it, extracting that extra little bit may actually cost the seller more at the end of the transaction.

5. Sellers who don’t clean up before turning over the keys
Sellers should imagine themselves as the future buyer. Would they want to walk into their new home and find twelve cans of old paint in the garage? Or an old sofa with a broken leg in the storeroom? The tip to sellers is to try to make the home as spotless as possible for the new owners. They’ll appreciate it and so will the agent.
“In the current climate, those who want to get the best price for their property are going to have to work a little harder,” says Gilmour.

“Sellers need to view their homes with a critical eye. When a person lives in a house for an extended period of time, they tend to turn a blind eye and overlook problem areas.

Learn to think like a buyer, says Gilmour, and always assume that potential buyers are going to spot the faults. “At the end of the day, sellers need to remember that a well-priced, well-maintained property will appeal far more than an over-priced, under-maintained home.”

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Adrian Goslett, CEO of RE/MAX of Southern Africa explains how, where and why buyers should do their homework before purchasing a property

Although buying a home is usually a happy and exciting experience, always remember to do your homework before making a decision. “Although in the fast-moving real estate industry you may feel pressurised to make decisions quickly, a home is a major investment and it is important to take the time to make it wisely,” says Adrian Goslett, CEO of RE/MAX of Southern Africa.

Financing and affordability

The first thing any prospective home buyer needs to determine is what they can afford and whether they qualify for a mortgage. Says Goslett: “There are a number of benefits of getting a prequalification for a home loan from a mortgage originator before you start looking. Bear in mind that this is not a guarantee, but it gives you a good indication as to what price range you can afford. Furthermore, a prequalification is also a clear indication to estate agents that you are a serious buyer. Today, with the National Credit Act, many applicants do not qualify for a 100% bond, and so the prequalification process will also indicate how much deposit you will need to save in order to qualify.”

However, Goslett notes that aside from mortgage prequalification and deposits, home buyers also need to work out whether or not they can afford all the other expenses involved in buying a new home, such as transfer duties, moving costs, home insurance, the costs of connecting the electricity, telephone, ADSL and television, as well as being able to modify and tweak the new home to meet their individual needs.

“It is also vital to work out what the monthly rates and taxes bill will be,” he says. “If you are buying within a development, you need to know what the levies will be and whether there are any increases planned for the near future. Another very important aspect when buying a sectional title unit is to check out the financials of the body corporate and to ensure that everything is paid up to date and running smoothly. If you buy a unit and the body corporate in question is behind in its payments, then that could become your problem down the line,” explains Goslett.

He notes problems can also emerge if the buyer submits an offer to purchase that is subject to the sale of their property. This is because the money to buy the new home is being funded by the sale of the existing home. “This is a standard practice, and all very well if the buyer has their property on the market for a reasonable price, but so often, many of today’s sellers still have totally unrealistic ideas on what their homes are worth and, as a result, put them on the market at unrealistically inflated prices. In such cases, it is really vital to determine a realistic price for your home before you make an offer on another one.”

Research the neighbourhood

Once you have decided what area you would like to invest in, then it is time to roll up your sleeves and do some CSI-type investigations into the neighbourhood. Says Goslett: “There are a number of things that you should investigate, namely the level of crime and traffic the area experiences, whether there have been any relatively recent or planned zoning changes in the area, what kind of amenities the area offers and how well these are maintained. The area’s schools and their quality are also an important aspect to investigate. In addition Goslett advises potential buyers to take note of the level of maintenance of the road infrastructure and pavements as well.

He says that the local residents’ association, municipality and police station offers a wealth of information for interested home buyers. Also, he highly recommends that anyone serious about buying a new home should make an effort to meet their potential new neighbours before making an offer to buy: “Not only are neighbours and excellent source of information about what’s going on in the area, but it is a good idea to determine whether you will get on with these individuals or not. Living next to neighbours that you don’t get on with can be a very stressful situation, and sadly, most homeowners only get to meet the neighbours once they have bought the home.”

Buying off-plan

If you are looking to buy off-plan into a development, be warned that although it is usually more cost effective, it does come with its own set of risks. Due to inadequate controls, an increasing number of unscrupulous developers have entered the market and produce sub-standard work and inferior new builds. The faults in any development often only appear months down the line when it is too late for the new owner to do anything about it. As a result, Goslett advises anybody who is interested in buying off-plan to do some in-depth investigations into the developers, as well s taking a look at the quality and durability of their prior developments, before signing on the dotted line.

Informed negotiations

In order to negotiate the best possible price for the house you want, you need to accumulate as much information about the value and market demand of the property in question. “Knowledge is power and any agent worth their salt should be able to provide an interested buyer with a list of properties in the area that have been sold, stating the asking price, as well as the actual selling price of the home. This will give you great comparative information with regards to the house you are interested in,” says Goslett.

Everyone knows that over time, areas change for the better and for the worse, and as such Goslett says that buyers should ask the estate agent for some statistics on the capital improvement (or decline) of any particular area over the last five or so years: “This will give you an indication on whether or not the area is a secure investment and whether it has potential for reasonable returns going forward, bearing in mind that property is a long term investment.”

Some other information that is of use with regards to the negotiating process is to determine the level of market competition and demand. Says Goslett: “Work out how many properties are on offer in the area and how long it took them to be sold. This will indicate how quickly you need to move in order to secure the deal. Also, try and find out how long the house you are interested in has been on the market – the longer it has been listed, the more open to negotiation the seller will most likely be.”

Structurally sound

And lastly, determining that the home is structurally sound is of course, very important, notes Goslett: “It is highly advisable to hire a reputable home inspector who will be able to give you a full report of the home in question. Also, it is worthwhile asking the existing homeowners if there has been a history of any flooding, damp or sewerage blockages.” He also notes that it is essential to check to see if all the fixtures work, such as the stove, all the lights, the pool pump, the electric gates and the alarm system.

While obtaining some of the necessary information about the property you intend to buy and the neighbourhood in which it is situated may seem like an unnecessary hassle, the more information at your finger tips, the more confidently you can negotiate the deal. “Buyers remorse on a purchase as large as a home is not a pleasant experience, and one of the best ways to avoid this kind of a situation would be to do your homework, thoroughly,” Goslett concludes.

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